"I knew I was different... I knew I was special. Always, I knew there was something."
--Tom Marvolo Riddle
August, 1938: After charming the skeptical matron with magic, manners, and gin, Dumbledore meets Riddle in his room and reveals that the boy is a wizard and invites him to Hogwarts.
Tom Riddle proves himself to be a bossy, hostile, independent, and calculating child who terrifies and torments the other orphans. At first, he guesses that Mrs. Cole has brought Dumbledore to lock him away in a psychiatric institution, but once he believes that Dumbledore is from a school for wizards, he is delighted with this explanation of his unusual abilities. Dumbledore uses magic to engulf Tom’s wardrobe in harmless flames, and prompts the boy to take out his stash of stolen trinkets. Making it clear that authority and discipline are to be taken seriously at Hogwarts, Dumbledore tells Tom that he must returns the objects to their owners (and that Dumbledore will be able to tell whether or not he does so). After Dumbledore has provided all the information Tom needs in order to get all his school supplies and get to Hogwarts, Tom reveals that he can speak to snakes.
Keep in mind that Harry (and readers) see this event through Dumbledore's memory in the pensieve.
Viewing this memory of Dumbledore's in the pensieve, Harry notices that all the orphans "were all wearing the same kind of grayish tunic." These sound somewhat similar to the shabby, crude garments enslaved house-elves fashion for themselves. -BB
It is curious that Riddle immediately assumes that at least one of his parents must have been a witch or wizard in order for him to be one. Dumbledore had not told him anything about how magical ability and heredity work. Maybe this indicates that the boy already had a preoccupation with notions of birthright and ancestry, but perhaps that is not entirely unexpected, coming from an orphan; it could have been merely a grasping attempt to learn something about his parents. However, his certainty that he could not be magic since she died does suggest the intermingled natures of his fear of death and his belief in the supremacy of wizards.
Voldemort purchased his diary on Vauxhall Road in London (CS13), and the closest orphanage to that location in the 1920s was the Stockwell Orphanage, begun in the mid-1800s by the famous preacher Charles Spurgeon. The Stockwell Orphanage might have been the place where Tom Riddle grew up in misery, although by all accounts it was not a repressive place of the type we imagine from Oliver Twist. Also, according to the original charter, children stayed at the Stockwell Orphanage only through age 14, and Riddle probably lived at his orphanage through age 17. We now know that Riddle's orphanage had girls, too - all but eliminating this one as a possibility.